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Jamaica becomes the first country to legalize CBDC

Following the approval of the senate, the Jamaican government has announced a nationwide digital currency. In a bid to provide alternatives to cash, the central bank of Jamaica has legalized Jam-Dex, a Central Bank Digital Currency (CBDC). This recent development sets Jamaica as the first country in the world to legalize CBDC. The government in Jamaica is striving to change its financial system and spur innovation.

Source: CoinTelegraph

In setting up an electronic form of digital currency, the Bank of Jamaica is setting the stage for a major shift from conservative norms and breaking the barriers and limitations of a cash-based economy. This would potentially make businesses and individuals easily access money. Beyond easy access, the CBDC ensures faster, safer, and cheaper local and cross-border payments. Central Bank hopes to play a significant role in the drive for financial inclusion in the Caribbean and globally.

Jamaica has been considering the prospects for a CBDC since August last year following several testing. The Central Bank will gradually introduce its digital currency into the country's financial system to avoid any case of disruptions and will remain hopeful that the potential benefits will outweigh the risks.

Jamaica in focus:

Population: 2.96 million in 2020 as compared to 2.94 million in 2019

GDP: $13.81 billion compared to $15.83 billion in 2019

GDP per capita: $4664 in 2020 compared to $5369 in 2019